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To What Exitent can Confidential Information be Disclosed without a Confidentiality Agreement?


This is a daily dilemma that every staff member of a Technology Transfer Office has to solve. On different occasions the answer will be different. There is no single answer to this question, other than “It depends”. 

In this issue we look at some of the things that it depends upon. 


The problem – destroys novelty and enables abuse 

Disclosing confidential information without a confidentiality agreement will destroy the novelty of an invention, and disqualify the invention from being patentable. All the commercial advantages that may have accrued from the commercialisation of the invention might as a result be lost. 

It also enables abuse. A recipient of confidential information, without any obligations of confidentiality (which usually encompasses the obligation to keep confidential as well as not to use the confidential information for purposes other than the permitted purpose) can use it in any way, without any accountability, and without the obligation to pay royalties or other financial compensation to the owner of the confidential information. 


The dilemma 

It would be nice to say that on all occasions nothing at all should be disclosed without first having a confidentiality agreement in place. Sometimes that can be achieved, but not always. 

The person with whom you may want to have confidential discussions, not knowing what the confidential information is, cannot assess: 

  1. their interest or disinterest 

  2. whether to be bothered even reviewing a confidentiality agreement 

  3. whether they may already know the confidential information, and do not want to be burdened by having to prove that they already know it 

  4. whether the confidential information is in a field they are themselves developing, and that there may be a risk of intermingling of information which could lead to future disputes. 


Some disclosure therefore has to be made before a confidentiality agreement is signed. 

Sometimes the disclosure can be no more than describing the technology is general terms, without disclosing any real confidential information. That should always be preferred. 

When that cannot be done, the difficult task is to assess what confidential information can be disclosed, and how far to go. 


Published patent application 

Has a patent application been published? This usually takes place approximately 18 months after the filing of the first application. 

If so, you can freely disclose everything that was published – it is in the public domain anyway. But you must be careful not to disclose any confidential information that is not included in the published patent application. 


Is a patent application about to be published? 

If so, you can also freely disclose everything that will shortly be published – it will soon be in the public domain anyway. But again, you must be careful not to disclose any confidential information that is not included in the patent application about to be published. 


Has a Patent Cooperation Treaty (PCT) application been filed? 

If so, it will be published. You could go as far as disclosing everything in the PCT application as it will be published in due course. 

This is unless putting it into the public domain so much earlier than the publication of the PCT application is disadvantageous. In that case, consider disclosing enough to get the other party interested. No question of destroying novelty will arise as the PCT application has been filed, and there might even be an earlier priority date if the PCT application was preceded by a provisional patent application. 


Provisional patent application filed 

The filing of a provisional patent application will confer a priority date, so disclosures after the filing of the application will not destroy novelty. 

But, this case still needs to be carefully considered. 

A provisional patent application may be allowed to lapse for any number of reasons. If a disclosure is made after the filing of the provisional patent application, that disclosure will not affect novelty in relation to the priority date for that application. 

But if it is decided to allow that provisional patent application to lapse, and to refile a new application, that disclosure will be before the priority date of the second application, and it may adversely impact on novelty under the second application, and destroy patentability. 

If there is a possibility that a provisional patent application may be allowed to lapse. a Confidentiality Agreement should be signed before a disclosure is made of anything covered by the provisional patet application.


No patent application filed 

In this case, consider deferring making disclosures until the patent application is filed, and also consider accelerating the filing of the application. It is always prudent to have an application filed before commencing discussions with potential commercial partners. 

Sometimes however, the filing of a patent application may be some way off, and confidential discussions need to take place. A carefully considered decision will need to be made on the extent to make disclosures. 

If the technology cannot be protected by a patent, so it is never intended to file a patent application, again, a carefully considered decision will need to be made on the extent to make disclosures. 


Can a Confidentiality Agreement be dispensed with? 

Normally no. It is not just patent related information that can be disclosed in discussions with a potential commercial partner. There may also be disclosures of: 

  1. know-how and trade secrets 

  2. data from experiments 

  3. insights and the results of analysis 

  4. commercial information relating to the opportunity, and the market etc. 


A confidentiality agreement needs to cover all of these, as well as cover the technology to be disclosed. 

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